Individual or Consumer Buying Behavior

Individual or Consumer Buying Behavior

Consumer Markets and Consumer Buying Behavior

Buying behavior is the decision processes and acts of people involved in buying and using products.

Consumer buying behavior refers to the buying behavior of ultimate consumers— those who purchase products for personal use and not for business purposes.

Understanding buying behavior requires knowledge of the consumption process and consumers‘ perceptions of product utility.

Consumer Buying Decision Process

The consumer buying decision process is a five-stage purchase decision process which includes problem recognition, information search, evaluation of alternatives, purchase, and post-purchase evaluation.

The actual act of purchase is only one stage in the process and is not the first stage.

Not all decision processes, once initiated, lead to an ultimate purchase; the individual may terminate the process at any stage.

Not all consumer buying decisions include all five stages.

Problem Recognition

This stage occurs when a buyer becomes aware of a difference between a desired state and an actual condition.

Recognition speed can be slow or fast.

Individual may never become aware of the problem or need. Marketers may use sales personnel, advertising, and packaging to trigger recognition of needs or problems.

Information Search

After the consumer becomes aware of the problem or need, he or she searches for information about products that will help resolve the problem or satisfy the need.

There are two aspects to an information search:

In the internal search, buyers first search their memories for information

about products that might solve the problem.

In the external search, buyers seek information from outside sources.

An external search occurs if buyers cannot retrieve enough information from their memories for a decision.

Buyers seek information from friends, relatives, public sources, such as government reports or publications, or marketer-dominated sources of information, such as salespeople, advertising, websites, package labeling, and in-store demonstrations and displays. The Internet has become a major information source.

Repetition, a technique well known to advertisers, increases consumers‘ learning. Repetition eventually may cause wear-out, meaning consumers pay less attention to the commercial and respond to it less favorably than they did at first.

Evaluation of Alternatives

A successful information search within a product category yields a consideration set (aka evoked set), which is a group of brands that the buyer views as possible alternatives.

The consumer establishes a set of evaluative criteria, which are objective and subjective characteristics that are important to him or her.

The consumer uses these criteria to rates and ranks brands in the consideration set.

Marketers can influence consumers‘ evaluations by ―framing‖ the alternatives—that is, by the manner in which they describe the alternatives and attributes.

Purchase

Purchase selection is based on the outcome of the evaluation stage and other dimensions.

Product availability, seller choice, and terms of sale may influence the final product selection.

The buyer may choose to terminate the buying decision process, in which case no purchase will be made.

Postpurchase Evaluation

After purchase, the buyer begins to evaluate the product to ascertain if the actual performance meets expected levels.

Evaluation is based on many of the same criteria used when evaluating alternatives.

Cognitive dissonance is a buyer‘s doubts that arise shortly after a purchase about whether it was the right decision.

1.Factors Influencing Buyer Behaviour

Situational Influences on the Buying Decision Process

Situational influences are factors that result from circumstances, time, and location that affect the consumer buying decision process.

Can influence a consumer‘s actions in any stage of the buying process

Can shorten, lengthen, or terminate the buying process.

Situational factors can be divided into five categories:

Physical surroundings include location, store atmosphere, aromas, sounds, lighting, weather, and other factors in the physical environment in which the decision process occurs.

Social surroundings include characteristics and interactions of others who are present during a purchase decision or who may be present when the product is used or consumed (e.g. friends, relatives or salespeople), as well as conditions during the shopping environment (e.g. an overcrowded store may cause the buyer to terminate the buying decision process).

The time dimension influences the buying decision process in several ways, such as the amount of time required to become knowledgeable about a product, to search for it, and to buy and use it.

Time plays a role as the buyer considers the possible frequency of product use, the length of time required to use the product, and the length of the overall product life.

Other time dimensions influence purchases, including time of day, day of the week or month, seasons, and holidays.

The amount of time pressure a consumer is under affects how much time is devoted to purchase decisions. A customer under severe time constraints is likely either to make a quick purchase decision or to delay a decision.

The reason for the purchase raises the questions of what the product purchase should accomplish and for whom. For example, people who are buying a gift may buy a different product from one they would buy for themselves.

The buyer‘s momentary moods or conditions (e.g., fatigue, illness, having cash) may have a bearing on the consumer buying decision process. Any of these moods or conditions can affect a person‘s ability and desire to search for information, receive information, or seek and evaluate alternatives. They can also significantly influence a consumer‘s post-purchase evaluation.

Psychological Influences on the Buying Decision Process

Psychological influences are those which operate in part to determine people‘s general behavior and thus influence their behavior as consumers. Psychological factors are internal, but are affected by outside social forces.

Perception

Perception is the process of selecting, organizing, and interpreting information inputs to produce meaning.

Information inputs are sensations received through sight, taste, hearing, smell, and touch.

Perception is highly complex, leading markets to increasingly take a multi-sensory approach.

Perception is a three-step process.

Although we receive numerous pieces of information at once, only a few reach our awareness.

Only a few pieces of information reach our awareness through a process called selective exposure, in which an individual selects which inputs will reach awareness. A person‘s current set of needs affects selective exposure, with preference given to one‘s strongest needs.

The selective nature of perception may result in two other phenomena: selective distortion and selective retention.

Selective distortion is changing or twisting currently received information; it occurs when a person receives information inconsistent with personal feelings or beliefs.

In selective retention, a person remembers information inputs that support personal feelings and beliefs and forgets inputs that do not.

Perceptual organization is the second step in the perception process. Information inputs that reach awareness must be organized by the brain in such a way as to produce meaning. An individual mentally organizes and integrate new information with what is already stored in memory.

―Closure‖ is an organizational method in which a persona mentally fills in information gaps to make a pattern or statement.

Interpretation, the third step in the perceptual process, is the assignment of meaning to what has been organized. A person bases interpretation on what he or she expects or what is familiar.

Marketers cannot control buyers‘ perceptions, but they try to influence them through information. This approach is problematic.

A consumer‘s perceptual process may operate so that a seller‘s information never reaches awareness.

A buyer may receive a seller‘s information but perceives it differently than intended.

A buyer may perceive information inputs to be inconsistent with prior beliefs and therefore are likely to forget the information quickly (selective retention).

Motives

A motive is an internal energizing force which directs a person‘s behavior toward satisfying needs or achieving goals.

A buyer‘s actions are affected by a set of motives, some stronger than others.

Motives affect the direction and intensity of behavior.

Psychologist Abraham Maslow conceived a theory of motivation; Maslow‘s hierarchy of needs organizes human needs into five levels. Humans try to satisfy these needs starting with the most basic. Once needs at one level are met, humans move on to fulfilling needs at the next level:

At the most basic level are ―physiological needs,‖ requirements for survival such as food, water, sex, clothing, and shelter.

At the next level are ―safety needs,‖ which include security and freedom from physical and emotional pain and suffering.

Next are ―social needs,‖ the human requirements for love and affection and a sense of belonging.

At the level of ―esteem needs,‖ people require respect and recognition from others as well as self-esteem, a sense of one‘s own worth.

At the top of the hierarchy are ―self-actualization needs,‖ which refer to people‘s need to grow and develop and to become all they are capable of becoming.

Most people do not reach the final levels of the hierarchy.

Patronage motives are motives such as price, service or friendly salespeople, which influence where a person purchases products on a regular basis.

Learning

Learning refers to changes in an individual‘s thought processes and behaviors caused by information and experience.

The learning process is strongly influenced by the consequences of an individual‘s behavior; behaviors with satisfying results tend to be repeated.

Inexperienced buyers may use different, more simplistic, types of information than experienced shoppers familiar with the product and purchase situation.

Marketers help customers learn about their products by helping them gain experience with them, perhaps through free samples, in-store demonstrations, and test drives.

Consumers learn about products indirectly through information from salespeople, friends, relatives, and advertisements.

Attitudes

An attitude is an individual‘s enduring evaluation of, feelings about, and behavioral tendencies toward a tangible or intangible object or idea.

Attitudes remain generally stable in the short term, but they can change over time.

An attitude consists of three major components:

cognitive (knowledge and information about an object or idea)

affective (feelings and emotions toward an object or idea)

behavioral (actions regarding an object or idea)

Consumers‘ attitudes toward a firm and its products strongly influence the success or failure of the organization‘s marketing strategy.

Marketers should measure consumer attitudes toward prices, package designs, brand names, advertisements, salespeople, repair services, store locations, features of existing or proposed products, and social responsibility activities.

Seeking to understand attitudes has resulted in two major academic models

The Fishbein Model (the attitude toward the object) can be used to understand a consumer‘s attitude, including beliefs about product attributes, strength of beliefs and evaluation of beliefs. These elements

combine to form the overall attitude toward the object.

The Theory of Reasoned Action (behavior intentions model) focuses on intentions to act or purchase. It considers consumer perceptions of what other people believe is the best choice among a set of alternatives and focuses on attitudes toward buying behavior.

Several methods help marketers gauge consumer attitude.

Direct questioning of consumers.

The Internet and social networking sites have become valuable tools.

An attitude scale is a means of measuring consumers‘ attitudes by gauging the intensity of individuals‘ reactions to adjectives, phrases, or sentences about an object.

Marketers may try to change negative attitudes toward an aspect of a marketing mix to make them more favorable, but this is generally a long, expensive, and difficult task and may require extensive promotional efforts.

Personality and Self-Concept

Personality is a set of internal traits and distinct behavioral tendencies which result in consistent patterns of behavior.

Personality arises from unique hereditary characteristics and personal experiences.

Studies of the link between buying behavior and personality have been inconclusive; although many marketers are convinced there is a link.

The VALS program is a consumer framework based on individual personality characteristics.

Advertisements may be aimed at certain personality types, usually focusing on positively valued personality characteristics.

Self-concept, or self-image, is a perception or view of oneself.

Buyers purchase products that reflect and enhance self-concept.

A person‘s self-concept may influence whether he or she buys a product in a specific product category and may have an impact on brand selection.

Lifestyles

A lifestyle is an individual‘s pattern of living expressed through activities, interests, and opinions.

Lifestyle patterns include the way people spend time, extent of interaction with others, and general outlook on life and living.

People partially determine their own lifestyle, but lifestyles are influenced by other factors such as personality and demographics.

Lifestyles strongly impact the consumer buying decision process, including product needs.

The VALS program

Developed by SRI Consulting Business Intelligence

One of the most popular frameworks for exploring consumer lifestyles. It divides consumers into eight groups: innovators, thinkers, achievers, experiencers, believers, strivers, makers and survivors.

2.Level of Involvement and Consumer Problem-Solving Processes

To acquire and maintain products that satisfy their current and future needs, consumers engage in different types of problem-solving processes depending on the nature of the products involved. The amount of effort, both mental and physical, that buyers expend in solving problems also varies considerably.

A major determinant of the type of problem-solving process employed depends on the customer‘s level of involvement, the degree of interest in a product and the importance the individual places on that product.

Levels of involvement may be classified as low, high, enduring, and situational.

High-involvement products tend to be those that are visible to others (e.g., clothing, furniture, or automobiles) and expensive, as well as issues of high importance, such as health care.

Low-involvement products tend to be less expensive and have less associated social risk, such as many grocery items.

A person‘s ongoing and long-term interest in a product or product category is referred to as ―enduring involvement.‖

―Situational involvement‖ is temporary and dynamic, and results from a particular set of circumstances, such as the need to buy a new car after being involved in an accident.

Consumer involvement may be attached to product categories (e.g., sports), loyalty to a specific brand, interest in a specific advertisement (e.g., a funny commercial) or a medium (such as a particular television show), or to certain decisions and behaviors (e.g., a love of shopping).

Involvement level, as well as other factors, affects a person‘s selection of one of three types of consumer problem solving: routinized response behavior, limited problem solving, or extended problem solving.

Routinized response behavior is the type of consumer problem-solving process which requires very little search-and-decision effort; it is used for low-priced, frequently-purchased products.

Limited problem solving is a type of consumer problem-solving process buyers use when they occasionally purchase products or need information about unfamiliar brands in a familiar product category; it requires a moderate amount of time for information gathering and deliberation.

Extended problem solving is the consumer problem-solving process employed with unfamiliar, expensive, or infrequently purchased products, such as a car, home, and college education; buyers use many criteria to evaluate brands and spend time searching for information and deciding on the purchase.

Impulse buying, in contrast, is an unplanned buying behavior involving a powerful urge to immediately buy something.

Influencing buyer behaviour

Social influences are the forces other people exert on one‘s buying behavior.

Roles

Every person occupies a position within groups, organizations and institutions.

A role is a set of actions and activities an individual in a particular position is supposed to perform based on the expectations of both the individual and surrounding persons.

Each individual has many roles and each role affects both general behavior and buying behavior.

Family Influences

An individual‘s family roles directly influence their buying behavior.

Consumer socialization is the process through which a person acquires the knowledge and skills to function as a consumer.

The extent to which different family members take part in family decision making varies between families and product categories. Traditional family decision making processes are divided into four categories: autonomic, husband dominant, wife dominant, and syncratic.

The family life cycle stage affects individual and joint needs of family members.

Within a household, an individual may perform one or more buying-decision roles.

The gatekeeper is the household member who collects and controls information—price and quality comparisons, locations of sellers, and assessment of which brand best suits the family‘s needs.

The influencer is a family member who expresses his or her opinions and tries to influence buying decisions.

The decider is a member who makes the buying choice.

The buyer is a member who actually makes the purchase.

The user is any household member who consumes or uses the product.

Reference Groups

A reference group is any group—large or small—that positively or negatively affects a person‘s values, attitudes, or behaviors.

There are three major types of reference groups: membership, aspirational, and dissociative.

A membership reference group is one to which an individual actually belongs; the individual identifies with group members strongly enough to take on the values, attitudes, and behaviors of people in that group.

An aspirational reference group is a group to which a person aspires to belong; the individual desires to be like those group members.

A group that a person does not wish to be associated with is a dissociative or negative reference group; the individual does not want to take on the values, attitudes, and behavior of group members.

A reference group is an individual‘s point of comparison and a source of information.

How much a reference group influences a purchasing decision depends on the individual‘s susceptibility to reference group influence and strength of involvement with the group.

Reference group influence may affect the product decision, the brand decision, or both.

A marketer sometimes uses reference group influence in advertisements to promote product purchases and high product satisfaction within a specific group.

Opinion Leaders

An opinion leader is a reference group member with knowledge or expertise who provides information about a specific sphere that interests reference group participants.

An opinion leader is likely to be most influential when consumers have high product involvement but low product knowledge, when they share the opinion leader‘s values and attitudes, and when the product details are numerous or complicated.

Social Classes

A social class is an open aggregate of people with similar social rank.

Criteria used to group people into classes vary from one society to another.

In the United States, we group according to many factors, including occupation, education, income, wealth, race, ethnic group, and possessions; analyses of social class in the U.S. divide people into three to seven class categories (see Table 7.4 on pp. 210 in the text).

Individuals within social classes develop some common patterns of behavior, attitudes, values, language patterns and possessions.

Because social class influences so many aspects of a person‘s life, it also affects

Buying decisions

Spending, saving, and credit practices

Type, quality, and quantity of products

Shopping patterns and stores patronized

Culture and Subcultures

Culture is the accumulation of values, knowledge, beliefs, customs, objects, and concepts that a society uses to cope with its environment and passes on to future generations

Culture includes:

Tangible items such as food, clothing, furniture, buildings, and tools

Intangible concepts such as education, welfare, and laws

The values and a broad range of behaviors accepted by a specific society

Because cultural influences affect the ways people buy and use products, culture affects the development, promotion, distribution, and pricing of products.

International marketers must take into account global cultural differences.

People in other regions of the world have different attitudes, values, and needs.

International marketers must adapt to different methods of doing business and must develop different types of marketing mixes.

Subcultures are groups of individuals whose characteristic values and behavior patterns are similar and differ from those of the surrounding culture.

Subcultural boundaries are usually based on geographic designations and demographic factors.

Marketers recognize that the growth in the number of U.S. subcultures has resulted in considerable variation in consumer buying behavior.

African American Subculture

Represents 12.3% of the U.S. population

Spend more money on depreciable products like clothing, entertainment and food.

Many companies have renewed their advertising focus on African Americans.

Hispanic Subculture

Is the largest ethnic group, with 15% of the U.S. population, and is growing rapidly

This subculture is composed of many diverse cultures from across Latin America.

Many companies have Spanish-language advertising and promotions featuring Hispanic and Latino celebrities.

Asian American Subculture

Represents 4.4% of the U.S. population and is comprised of 15 different ethnic groups.

Individual language, religion, and value system of each group influences purchasing decisions, although some traits are common among all the ethnic groups.

Some cross-culture traits include an emphasis on hard work, strong family ties, and high value placed on education.

Consumer Misbehavior

Consumer misbehavior is behavior that violates generally accepted norms of a particular society.

Definitions of misbehavior can vary between cultures

Shoplifting, consumer fraud, abusive consumers, and pirating/illegally copying products are all examples of consumer misbehavior.

Understanding the psychological and social reasons for misconduct can help in preventing and responding to problems

4.Models of Consumer Behaviour

The psychoanalytical model : The psychoanalytical model draws from Freudian psychology. According to this model, the individual consumer has a complex set of deep seated motives which drive him towards certain buying decisions. The buyer has a private world with all his hidden fears, suppressed  desires     and totally subjective  longings.  His buying action  can  be  influenced  by appealing   to those desires and longings.

4.1.Learning model:

All theories of buyer behaviour have been basically based on a learning model namely, Stimulation- Response or more popularly known as SR model. SR learning theory is very useful to modern marketing and marketers. Learning is the centrifugal point in the entire study to human behaviour. Learning, as noted earlier, refers to a change in the behaviour which occurs as a result of practice. It is a change in the behaviour that results from previous experience and behaviour in similar situations. What is important, learning is a product of reasoning, thinking, information processing and, of course, perception. Therefore, behaviour is deeply affected by the learning experiences of the buyers.

4.2.Sociological model:

According to sociological model, the individual buyer behaviour is influenced by society— by intimate groups as well as social classes. That is, his buying decisions are not totally determined by the concept of utility. That is his buying decisions are governed by social compulsions.

Nicosia model: As well known consumer motivation and bevaviour expert Mr. Nicosia presented his buyer model in 1966 which attempts to establish linkages between the marketing firm and its consumer. The essence is how the activities of the firm influence the consumer and result in his direction to buy. According to his model the messages from the firm first influence the predisposition of the consumer towards the product, he develops a certain attitude towards the product depending on the situation.

4.3.Howard Sheth Model

John Howard and Jagdish Sheth presented their buyer model in 1969. its an integrated model. It assumes problem solving approach in buying and adopts input-output or system approach in buying. Howard introduced learning process in buying. Satisfaction leads brand loyalty. Discontentment creates brand switching by the buyers. It other words , the logic of this model that there are inputs in the form of stimuli. There are output beginning with attention to a given stimulus and ending the purchase. In between these inputs and outputs , there are variable affecting perception and learning. These variables are ―hypothetical‖ as they can not be directly measured at the time of occurrence.